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Britain needs both megabuilds but also a specialised SME property project finance market. Mike Bristow CEO of CrowdProperty a P2P based in Birmingham offers (to both sides) development finance loans and improves risk-returns by disintermediating the SME property finance market. We also debate whether P2P itself is morphing into asset securitisation for institutions (and to an extent retail funds as most folks are too busy/uninformed to second-guess experts by attempting to cherry-pick.)

Topics discussed include:

• project development – HS2, Thames Estuary Airport
• development and political boldness in the 19thC compared to political timidity now
• in the year the third runway at Heathrow was kicked into the long grass China built over 50 runways..
• we are taking longer and longer to make fewer and fewer decisions
• Mike’s career journey
• Mike’s experience investing in property since 2002
• dysfunctional changes in UK rental market
• experience of smaller scale property project finance being broken and how tech can solve
• real estate is very slow in adopting new technology
• the foundation of CrowdProperty for residential development
• short term finance vs term finance and the differences and failings or successes in those markets
• the UK needs 300k homes built per annum but builds a little over half that number – hence the crazy prices for property
• gap in the market for improving finance to SME developers
• the three key requirements are speed, ease and certainty of funding
• London infilling projects – micro development near Waterloo densification
• the challenge of P2P re certainty of chunky finance loans
• the importance of institutional lines of credit/investment to ensure this alongside the retail inflows
• is P2P morphing into asset packaging for institutions? cf LFP122 on securitising trade finance
• is the retail market itself morphing into preferring funds given the lack of time to cherry pick
• property finance is traditionally a broker-driven market
• brokers take 1-2% off both sides and therefore if one can disintermediate the broker by having direct relationships with developers (as CrowdProperty do) there is a tremendous improvement in risk:return
• automated valuation vs manual added value – heterogeneity of housing stock being the pivot point
• CrowdProperty have done 97 projects, £40m property development funded to date with £100m end product
• they are seeing £1.7bn pa direct applications for project funding via their platform
• rejection rate of >95% of applications
• the advantage of institutional due-diligence on platforms for retail investors
• regional Fintechs
• being based in Birmingham – a mere 1+hr train ride from London – reduces the cost-base by 50%, avoids offshoring and ensures the whole team is in the same office
• blame the Norman invasion for London over-centralising the microeconomy – right up to Fintech